Understanding Property Taxes

One big (and very good!) question I often hear is:

Why, within different subdivisions of the same large residential development, are property taxes so different?

Answer:

Two major factors may come into play here:

1)  “Save Our Homes” (SOH)  - a constitutional benefit approved by Florida voters in 1992 – places a 3% limitation on annual assessment increases on Homestead properties. So, for Homestead properties, the assessed value (for taxation purposes) will not increase more than 3% each year (or the percentage change in the Consumer Price Index, whichever is less).

2)   Homesteadis another constitutional benefit. It allows for a $25,000 exemption (deduction) from the assessed value of your real property if you use it as your primary residence. (Additional exemptions are available for widows/widowers, the legally blind and the disabled. See link at end of text.)

So, let’s say a home was purchased 10 years ago and the homeowners applied for and were granted Homestead. Normally, the assessed value (for taxation purposes) on that home would not have been increased more than 3% annually, in accordance with SOH (above). If this home were now sold, then the tax amount would change to reflect the current fair market/just value of the property (because the old owner is out of there, and the old SOH situation has ended). A new fair market/just value assessment will become the base value for “SOH” purposes for the new owner/homestead applicant.

A similar situation would exist with properties built in a new subdivision of an existing residential community. Homeowners with homestead exemption(s) who have been in the community for years are probably paying much lower tax amounts than their new neighbors in the new subdivision. Why? Because SOH  put a cap on how much their property taxes increased annually, even when prices for new homes (and/or resales) jumped dramatically (as we have seen).

So, if you’re purchasing real property in Florida and can make it your primary residence, you definitely want to apply for Homestead. Save Our Homes (SOH) is automatic once you’ve been granted Homestead.

More questions?
Drop me an or visit the “Frequently Asked Questions” section of the Lee County Property Appraiser’s website: www.leepa.org

Appraised Value,
also referred to as assessed value, fair market value or just value, is determined each year by the city Property Appraiser and is based on factors such as:

• Improvements to the property from one year to the next (ie, the addition of a swimming pool, etc.)
• Possible negative affects caused by damage (ie, a fire or storm, etc.)
• Market value (as reflected in transactions between sellers and buyers)
• Local economy and forces of supply and demand

The Millage Rate
is determined by each taxing authority in Lee County, based on the amount of tax dollars necessary to fund their annual budget.

Millage rates are in dollars per thousand of assessed value; that is why we need to divide by 1,000 after multiplying the appraised value by the millage rate when calculating the property tax amount (as in the sample equation).

A tax authority
(also known as tax district) has the power to assess property owners annually in order to meet its expenditures for the public good. (Each assessment is based on the amount of revenue needed to provide such services as law enforcement, fire protection, schools and other public services.)

Property Appraiser:
Honorable Kenneth Wilkinson
Lee County Property Appraiser

P.O. Box 1546
2480 Thompson St 4th Fl
Ft. Myers, FL 33902-1546

E-mail:wilkinsonk@leepa.org
239-339-6100
239-339-6160 FAX